Autonomy For All

Sunday, January 4, 2015

There are four broad outcomes depending on whether we act to mitigate climate change, and whether it is as bad (or worse than) what the models predict in terms of temperature increase by 2100 and the associated likely impacts of a +4-8C world environment:

We do nothing. Global warming is not a big deal.

We do nothing. Global warming is as bad or worse than feared.

We act. Global warming is not a big deal.

We act. Global warming is as bad or worse than feareded.

Key here is the only "variable" we as humans control is whether we act. We can (and have) studied the hell out of the science to determine the truth of the second part, but the only choice we face is whether we (collectively as a species & planetary civilization) act decisively enough to significantly reduce emissions versus the status quo emissions track.

What are the consequences of these four paths?

Outcome: Ideal. No economic loss to an economically forced conversion to a carbon free energy system, no major harms from greenhouse gas emissions.

Outcome: Catastrophic. Billions probably die. At the outlier of possibilites, humans actually go extinct. At minimum, huge economic & social impacts, particularly when considering the secondary effects like wars & unrest from water & food shortages. Millions of people die and millions of species go extinct.

Outcome: Ok. Some unnecessary economic loss (Stern put it at 1% of global GDP in that 2005 UK study). Plus side: We move to a renewable (cleaner) energy system. No more oil spills, black lung, flammable fracking tapwater, Asian brown cloud, and the host of non-climate related ills from the fossil energy system.

Outcome: Ok. Some economic loss (Stern's 1%) compared to #1, but this is illusionary since if #4 is true then global warming is a big problem and outcome #1 was impossible anyway, so this is also "ideal." Depending on how well we acted, the various harms of global warming are mitigated to some degree so hurt less (or perhaps not at all). Same benefits of #3 for moving to a renewable energy system.

So you, as emperor of the world for a day get to make 1 decision, act or don't act on global warming. Down one path ("don't act" - #1 and #2) you get one good outcome and one very bad one. Down another path (act) you get two pretty ok outcomes. As a risk mitigation exercise, the prudent choice is clear. It's not so different as the choice you make to buy insurance on your home. If nothing ever bad ever happens to your home, that money is wasted! Yet if it does, you're glad to be covered.

It's not even as if you have to wait for the year 2100 or something, if we act on global warming, enact carbon taxes and do a "Manhattan project" for clean energy, and then uncover strong evidence the climate problem is far less serious than feared, the carbon taxes can be repealed and the clean energy projects shuttered. The acts we take on climate change are reversible if we really don't like the outcomes. They're human laws & treaties. The consequences of climate change itself are physics and short of some much much riskier geoengineering projects, there's very little we can do to stop it past a certain point.

Am I understating that 1% cost figure to mitigate it? Sure, maybe. But we currently spend something like 2.5% of global GDP on military expenditures and few seem to feel this deadweight spending is some kind of global economic disaster choking off human potential. During WWII and the heights of the Cold War, military spending (particularly in the combatent nations) was well into the double digits. We have proven our societies can withstand relatively long spurts of much higher economic committment to shared goals without great economic loss.

Tuesday, September 23, 2014

In 2013, City Council voted 25-16 in favour of a motion that (among other things) asked the province to implement legislation authorizing ranked balloting (or "instant runoff voting" - IRV) for municipal elections in Toronto. Since then, the re-elected Liberals included a specific promise to implement such legislation for all Ontario municipalities.

What Is It?

Quite simply, instead of just picking one candidate to vote for, you rank them in order of your preference. The winner needs to get 50% + 1 of the vote. Everyone's first choice selections are counted first, if no candidate gets over 50% of the first choices, the bottom candidate is eliminated and their 2nd choice votes are counted, added to the non-eliminated candidates. If no one is over 50% at this point, the next lowest candidate is eliminated and the process continues until someone gets over 50%.

Why Is That Better?

The "first past the post" (FPTP) system allows a candidate to win on a plurality of the vote, which can be quite low (like 27%) depending on the number of candidates and the vote breakdown. This means the winner is theoretically opposed by the majority of the voters. Or maybe there's a bunch of people who wanted someone else more, but are okay with the winner. We don't know because FPTP doesn't capture this information.

This is why FPTP lends itself to strategic voting (fear of dreaded "vote splitting"), where people vote for someone they don't particularly support, in order to hopefully defeat someone they despise. "Lesser of two evils" voting. Under IRV, voters can pick who they most like first, and pick the safe pick to defeat someone they hate 2nd or even 3rd.

What Needs To Happen For This?

It's important to know it's not "in the bag" because the provincial Liberals promised it and won a majority. Even assuming they keep their promise and pass a bill to allow IRV, the next City Council would have to do a bunch of things to make it a reality in time for 2018.

Despite Council voting pretty strongly for this in 2013, one of those "next things" to actually make this happen was quietly buried this year as a motion to ensure that if the city buys any new vote counting machines, they pick ones compatable with IRV first failed to get two-thirds support needed to be passed directly in council (member motions not vetted by committees need a two-thirds supermajority to pass) was redirected to the Government Management Committee where a bunch of Ford allies (including Doug Ford) delayed it until 2015 (ostensibly to ask the City Clerk for cost information, but clearly a pretext).

Beyond voting machines, a bunch of money will have to be spent in changing the election system, the ballots, and in voter education and outreach. All of which can be delayed in ways big and small until the clock runs out on 2018.

This is just a small taste of the legislative slow-walking that an unfriendly administration can put such a thing through, even if the next Council retains a solid majority in favour of implementing IRV - a Mayor who does not, and makes a point of picking a Government Management committee chair who shares that view can do much to prevent or delay it, at least past the 2018 election where the game can begin again. By then, maybe a new provincial government is elected and if no municipalities are using IRV, perhaps they repeal that law and it dies.

Where Do the Mayoral Candidates Stand?

Only covering the "Big 3" - Olivia Chow is firmly in favour. Doug Ford is firmly against. John Tory is at best non-committal if you're being naively generous, but really he is opposed. Let's look at what he told MetroNews:

The province is not "examining" electoral reforms, they specifically promised to provide municipalities the option of ranked balloting. There is no "process" that Tory would be "preempting" and even if there were, the idea that a political candidate of a municipality couldn't express an opinion about electoral reform while some process of examining such was under way is patently absurd. If the province was studying changes to municipal taxation powers or amalgamating the whole GTA into a mega-city, I'm pretty sure Tory would express an opinion about that. This answer only makes sense as a way of clouding the issue to make unwillingness to support IRV sound like some kind of openness to it.

But Tory's Going To Win!

It certainly seems like it now, but even so ranked balloting got this far even with vehement opposition of the Fords and their council faction, and while 2013 was not a great year for the Fords, June 2013 predates Rob Ford losing his powers over committee chairs and the executive, so he still had some juice. That said, there's many reasons to suspect Tory would be more effective at using the Mayor's powers more effectively to stop IRV if he makes a point of it.

Beyond that, a Mayor Tory who wins the election outright with >50% of the vote will be much harder to fight than one who squeaks by with ~40% of the vote. That alone becomes a strong political argument for proponents of IRV to throw at him and his allies if he tries to fight it. If he wins outright, he won't look quite so hypocritical in opposing it, after all he didn't need the non-majority aspect of FPTP to win. In short, if Chow can't win, it is still worth blunting Tory's margin of victory. Councillors watch that stuff. Councillors in wards which get higher support for the Mayor than themselves tend to be more pliable to the Mayor's wishes, particularly early in the term.

If he wins with a so-called "mandate" (e.g. a very big win) he could early on have council vote on buying new voting machines that don't support IRV, then argue it would be "irresponsible" to adopt IRV for the 2018 election once the province passes their bill. He could signal the Premier to slow-walk the bill (and she might co-operate). He could ensure the Government Management committee is stacked with opponents and bury attempts to bring it up in that committee. He could try and insist a city-wide referendum is needed to adopt this, or bury it in studies until it really is too late to implement for 2018. Would he do these things? I don't know, but given the long track record of inertia and defenders of the FPTP voting system, we should probably assume anyone not openly for it is against it, and even some of the politicans openly for it are secretly against it.

But I Prefer Some Other System That's Far Better!

First past the post has had a monopoly over the Canadian electoral landscape for our entire history basically. Our largest city adopting an actual new voting system would break that monopoly and create a real world local example of an alternate voting system in practice. It might just catch on provincially and federally! It is incremental as it doesn't require a new governing system and the kind of thing people can adopt without the easy fear mongering of "endless minority governments" that say, proportional representation brings.

It's also much further along politically than any other idea, it has momementum. It just needs the Wynne government to keep their word, and the existing strong majority on council supporting it to be re-elected and stick to their guns (though a pro-IRV Mayor would make it a virtual lock).

The best part for supporters of other systems is that IRV most likely makes your preferred system easier to implement. Nothing is better for defending the status quo than FPTP, where people supporting the status quo can usually rally around a status quo candidate or party (typically conservatives) while proponents of "change" have a harder time uniting around some specific new thing to do. So long as ~40% want FPTP, if the other 60% can't assemble at least 41% in favour of one specific other thing, they'll divide among several and the status quo will win (see "divided left, the").

This is a part of why referenda on major system changes typically fail: The status quo becomes the "safe" option and gets votes from many people who support some change, but not whatever specific change is on the ballot (like in the 2007 Ontario referendum on a new voting system).

Under an IRV system, proponents of yet another system would have a better chance of winning support as voters could make candidates supporting their favourite alternate system their first choice. Maybe some such candidates would win, and maybe others would see the idea was popular and adopt it.

What Do We Have To Lose?

Let's get on this, this is a generational opportunity to enact the kind of reform that makes many other reforms possible. No, it's not a panacea, it doesn't fix all ills and frankly if we'd had this in 2010, it's probably that Rob Ford would have gotten at least 3% of the 2nd choice votes from Rossi & Pantalone to get over 50% and win anyway. But it would ensure Doug Ford couldn't have won this time around with his ~35% voting ceiling and 65% of the city ready to evict all things Ford. It would also ensure online favourites Goldkind and Baskin get a lot more votes than they will, and possibly would have averted the need for David Soknacki to take his name off the ballot (though he likely would still have suspended his largely self-funded campaign). It would also affect a number of council races in every election. Even if all you want to do is "shake things up" this is the best option on the horizon to do so.

Saturday, September 13, 2014

The recent switch of Doug for Rob in the Mayor's race, and Rob for Michael in the Ward 2 race is in a sense shocking, but not surprising. Speculation about this possibility had existed for some time. I see outraged talk about "feudalism" and family dynasties. Good. It's been apparent that the Fords were always about setting up a bona fide old style "Tammany Hall" political machine in Toronto. Consider:

The radio show on CFRB 1010. This was far underestimated by digital/online types in its significance. Ford had a multi-hour open mic to the whole city every week, with no neutral "host" to direct the agenda or put any limits, and his brother to co-host. It was qualitatively different from any previous Mayor's anodyne style of "civic engagement" shows on Cable 10 or CP24, hosted and generally just about run of the mill constituent issues & questions. The Ford show was openly a dialog to "Ford Nation" and no political punches were pulled.

The network of donors, particularly out of the city in the rest of the province. This is the stuff of nightmares for Councillors. It's pretty easy to imagine this network being given signals to drop a few hundred thousand (collectively) on a couple council challengers to incumbents who have upset the Fords, and maybe drop some more on any friendly councillors in trouble. Ford wouldn't need to defeat every unfriendly councillor, just enough to scare the rest, especially the ones in marginal wards who won by close margins.

The enemies list. Yes, he has a list of councillors he wants defeated. You don't assemble such lists unless you have plans to do something about it.

The robocalls. The radio show wasn't enough, Ford used these as a direct line to constituents. Again, probably undervalued by digital/online types, but for those key most-likely-to-vote older demographics who also aren't as often online, this is a key touchpoint.

The permanent campaign. I've written at length about this before, but basically Rob Ford never really stops campaigning. His obsession with constituent services is the most obvious aspect of this. Numerous people in his city-funded Mayoral staff (like David Price) were focused solely on this.

All of these are the more-or-less visible aspects of the machine operation. One may speculate, given what we know about Ford's various underworld friends & connections whether there was a much darker portion to this machine, a group of Nixonesque "plumbers" perhaps (think of the prison beating alleged to have been ordered by Ford).

Once you accept the motivation of establishing a permanent political Ford family machine, many of Ford's policy preferences make sense:

Despite a much ballyhooed hatred of "gravy" - Ford has never said word one in opposition to the City program of rebating up to 75% of political donations, even to non-Toronto residents or voters. Even in the 2014 budget process where he was obviously unable to come up with anything like the $50-$60M in savings he promised he could, this juicy plum was left untouched.

His various attempts to eliminate the City's accountability officers like the Omsbud & Integrity commissioner. For a guy who makes such hay on the "gravy train" and being so very honest, it might seem strange that he was so vehement in opposition to mechanisms to hold politicians accountable to voters. But even as relatively toothless as these offices are, they have been a regular thorn in his side, and if they don't outright stop aspects of his political machine, they often issue reports ruling they are violations of various rules (like the robocalls to Ainslie's ward).

Hatred of 311 and other forms of city employed professional customer service help. Ford doesn't want government to just work, he wants constituents to need his help to get what they need from the city. A simple, easy to remember number that can provide nearly any city service in one call or email really reduces your need to call your councillor or the Mayor for help with that leaky fire hydrant or unpatched pothole. Those old enough to remember the "blue pages" part of the phone book may remember a lengthy list of city deparments & agencies one might have to navigate for services, a nightmare of waiting on hold, missed return calls & bureaucratic runaround.

Opposition to s.39 and any spending out of it. There are legitimate concerns with s.39 (funds contributed by developers held at ward-level under the direction of that ward's councillor for improvements to the ward) but obviously Ford would not like anything which allows Councillors to get improvements to their ward, and look good to their constituents without his blessing. The funds do need City Council approval to be spent, but as Ford did not yet have a firm grip on Council as a whole, s.39 was a threat to him and his machine. In particular, downtown and high density wards with the most progressive councillors tend to get the most s.39 money because they have the most development.

This is a partial list, not an attempt to be comprehensive, but the lens of "aiding my political machine" often allows otherwise strange Ford policy preferences.

The most terrible aspect of this, is that it probably would have worked except for the drug & alcohol problems. Absent that, it really is difficult to imagine he would not be sailing to re-election, and possibly getting a slate of "Ford Nation" councillors elected to solidify his control over council. It was pretty clear for example, that the scheme with Doug not registering for election was to allow him to continue hosting the radio show this year, a plan only foiled by Ford's crack videos causing CFRB to cancel the program (they tried to resume it with Sun News and then via Youtube, both evidently failures). The network of big money donors has apparently largely withered away, big money opting instead for the safer alternative, John Tory. Rather than advancing their control over Council, the Fords were left fighting just to hang on (and losing even at that).

No, we should not be surprised that they "dare" swap Doug for Rob, and opt to have Rob hold the "safe" home base of Ward 2 (Michael was far from a sure win). The political machine is down but not out, and they will fight ever to restore it unless defeated completely.

Saturday, September 6, 2014

Earlier in the Mayoral campaign, with the unsurprising exception of Ford, the other four (then) "major" candidates (Chow, Stintz, Tory, Soknacki) solidified their positions on property taxes around a general consensus that such taxes should match inflation.

A number of people whose views I respect have written some thoughtful pieces on how this is bad public policy:

Matt Elliott argues that aggregate measures of inflation like the consumer price index can often be poor guides to what kinds of uncontrollable price increases city operating budgets may face, necessitating a larger-than-CPI tax increase just to maintain existing services.

Cityslikr took Olivia Chow in particular to task over her pledge to say "around" inflation, given the real need for service improvements, many of which she is campaigning on, that won't plausibly fit within the existing city budget.

Marc Coward makes a similar point more generally, pointing to things like the growing unfunded TTC "state of good repair" project backlog, and the unfunded repair backlog at Toronto Community Housing.

Throw in a report like this one from U of T's Munk School municipal affairs institute which shows that Toronto's property taxes are low by any standard you wish to use, and have fallen over the past decade, and openly states Toronto "does not have a spending problem" and it's pretty clear all these people are right. Property taxes do need to increase, and by more than inflation if we are to have the kind of city many of us tell pollsters and politicians we want.

Yet, I can't but see a political consensus that property taxes should increase every year in nominal terms to keep some kind of pace with inflation is actually progress. The "original sin" of the amalgamated city is our first megamayor, Mel Lastman instituting a 3 year property tax rate freeze. For those who understand how inflation works, the consumer price index for Canada increased over 7% during that same time meaning the city was (assuming its costs matched the CPI) funding programs & services that cost 7% more, while taking in no additional revenue. Something has to give.

As the piece linked to in reference to Lastman points out, things did "give" under Miller, where we see the introduction of the vehicle registration tax and the (municipal) land transfer tax. Perhaps Miller should have just pushed for a big "catch up" property tax increase, but in case, more revenue was badly needed. In fact, the LTT has been so successful that it allowed Ford to irresponsibly return to Lastman era policies by freezing property taxes during his first budget, 2011. That means, at that point, in 13 years of being a megacity, Toronto had frozen rates for nearly a third of its life.

Anecdotally I frequently encounter people who really don't get inflation (or how property tax rates work, hence pieces like this and this). They see the dollar cost of their property tax bill go up, year after year, and see it as a burdensome increase, imagining spend-thrift politicians throwing wild parties with the "extra" cash, rather than just treading water in the ever rising tide that is inflation. Of course, some people's incomes do not keep pace with inflation either, so it may actually be an increasing burden to them, but in the aggregate, inflationary increases should not be doing so on average.

The point is that politicians like Ford and Lastman are playing to a real constituency of people who intuitively think that property taxes should be nominally the same year after year barring some major new program like a new subway or something that would explain an increase (which politicians like Ford & Tory also try to claim they can do without a tax increase).

In the face of all this, I can't but see a general political consensus from left to medium-right that property taxes should generally need to increase in nominal terms as some kind of progress. I'm not clear that it represents better awareness in the general public on these topics (I doubt it), and would still look for the city to increase its revenue take from sources that automatically increase with inflation (like income taxes) so that the city's revenues are not so prone to demagoguery, but failing that, I'll take this as a good sign.

Wednesday, August 27, 2014

To recap: John Tory has centred his Mayoral campaign on a promise to build a heavy surface rail (he calls "surface subway") electrified line 53KM long that mostly uses 2 existing GO-Transit non-electrified lines and builds 12KM of new track along Eglinton west into Mississauga terminating just south of Pearson aiport. He claims to need $8 billion to build it, and expects the City, Province and Federal governments to each pick up one-third ($2.67B each).

Image by Tory parody account @JohnToryT0 (zero)

There are several technical (some, like capacity at Union station, quite serious) concerns about the viability of the specific route & stations he proposes, but more importantly is how such a large sum could be funded, several times more costly than any transit project in contemporary memory (possibly the Yonge or Bloor lines would be equivalant if you do the inflation adjustments). How does Tory expect to raise the cash?

Federal

This is the most mysterious part of the funding plan, that has received only scant attention. Why does Tory expect to be able to get $2.67B out of Ottawa? This is multiples of what Ottawa has ever provided to Toronto for any project. There was dancing in the streets last year when Flaherty announced $660M for the Scarborough subway, and that wasn't some "favour" he was doing for Ford, it was money already allocated to Toronto out of an existing national infrastructure funding program that every city can draw proportionally from. Toronto is probably due a bit more money from that program (the "Building Canada" fund) but I can't figure it to be more than a few hundred million. If Ottawa is going to come through this will be net new funding. Tory harps on his good relations with Harper, and 2015 is a Federal election in which the Tories are already trailing badly in the polls, so it's possible Ottawa will try to buy some GTA love but that's a lot of money for a city the rest of the country largely dislikes and the couple competitive seats for the Tories in Toronto may be cheaper to buy elsewhere. Pinning all our hopes on this seems far fetched.

Ottawa has previously committed $333M to the Sheppard LRT project, which would certainly be available if the Sheppard LRT is put "below the line." More on this below. Still, I can't even come close to $2.67B out of known pools of money for Transit from Ottawa. This is a big problem for Tory and his blithe certainty that he can wrest vast sums on the strength of his personal connections should be viewed with skepticism.

Provincial

The re-elected majority Liberals have committed to a substantial long term GTHA heavy transit funding plan, so in principle there are the requisite billions of dollars in existence of budgeted money for Transit. The issue is that those billions are spoken for in other, already planned projects. Something would almost certainly have to be defunded in order to provide the $2.67B for the province's proposed share of SmartTrack. Given the debt/deficit panic and various warnings of lowering Ontario's credit rating, and the government's election pledge to balance its budget by 2018-2019, it's almost impossible to imagine them agreeing to a new multi-billion dollar transit allocation for Toronto.

Another key fact is that the province has committed up to $12B to electrify the entire GTHA GO train network of 7 lines and provide 15 minute all-day service on them, aiming to do this in 10 years (which they admit is ambitious).

Ontario has committed to frequent, all day service on all this, regardless of who is elected Mayor.

The vastly most likely thing to give way in this would be the approved & (currently) funded projects to build LRT lines on Finch avenue west & Sheppard avenue east, two Miller-era "Transit City" projects that died under Ford and rose again from the dead when Council overthrew his control over transit in 2012. Between the two projects there is about $2.5B in current provincial dollars (plus the $333M Federal for Sheppard). John Tory has made clear that not eating up precious lanes of road space for cars is his top priority (see his Eglinton Connects rejection statement) and even told Spacing back in May that he would push to "delay" these lines in order to make a "Yonge relief line" (which somehow later became "SmartTrack" but let's leave that issue) the priority for funding. He was later quoted saying they "aren't his priorities."

More recently he told Daniel Dale in the Star that none of this was true and that he "supports" these lines being built and "has no intention" of asking to delay them. Cynically reading between the lines, this leaves open the possibility that if the Province suggests yanking the funding to these lines, Tory would "reluctantly" agree. He clearly is not going to go to any lengths or expend any political capital to see these lines built. At best his position is "cancellation if necessary, but not necessarily cancellation."

Let's read some tea leaves here: The province very likely does not want to build these lines either. The Transit City master agreement was cut in early 2007 by the previous Premier's government, in the shadow of a fall 2007 provincial election in which the Liberals would be facing down an affable & charismatic conservative party leader by the name of John Tory, a well known "red" Tory moderate, the kind of guy who could bury the nasty reputation of the Harris years and return Ontario to its decades long reign of non-stop PC governments up to Bill Davis. Tory even worked for Bill Davis himself! Tory's 2007 loss is considered one of Canada's epic political blunders over the religious school funding issue, so it's not as if the 2007 era Liberals were wrong to fear him.

In short, Miller cut an awesome deal for the city in 2007, with a government that was afraid of what it was facing, and eager to shore up the key 416 ridings (often ripe for picking by the NDP). The deal for these LRTs sees Toronto paying nothing to build them, not responsible for any cost overruns, and the Province even picking up the ongoing capital maintenance and sharing in the operating cost of the lines, which would be run as TTC lines. In short: "Free" rapid transit. Plus getting Ontario back in the game of funding some share of TTC operating costs is a big deal. Higher governments aren't fond of paying operating costs for things they don't own/run, there's no glory in it. Capital funding is fun, you get ribbon cuttings and comemorative plaques. Operating funding is a budget item voters don't notice.

Add to that these are two rapid transit projects solely for Toronto of no practical use to those ultra key 905 ridings, where governments are made or broken in Ontario. SmartTrack on the other hand is actually a regional line (and Tory says it would be run by Metrolinx, which likely means it will be branded as a GO Transit line), going to vote (and donor) rich Markham & Mississauga. The incentives are all for killing these lines.

Sure, they'd call it a "delay" - but given that there are signed agreements in place (including with Bombardier for the LRT vehicles) there would be real penalties to any delay. Further, any capital project put "below the line" of actual available funding is heavily unlikely to ever come back above. At the very least you are talking about a delay of at least a decade before fiscal and political conditions might allow these lines to be refunded, and by then the EAs won't be valid and frankly the areas may have changed such that these projects no longer make sense anyway.

The original Transit City vision

You can scan the list of "Big Move" projects but you won't find anything else anywhere near as juicy a target. Tory can deny this is where he expects the Provincial share of money to come from, but it's difficult to imagine it playing out any other way.

Municipal

Here the game is about the "Tax Increment Financing" (TIF) scheme. Tory is pledging to raise $2.5B of Toronto's $2.67B share from TIF, under a never used 2006 Ontario law that actually currently can't be used because the province has yet to implement some key regulations on it. The recent (must read, go, read it if you haven't) Marcus Gee piece in the Globe and Mail reveals that the primary intended beneficiary of this law was Toronto, but it has never been put into use because the city and province don't agree on how it should work.

The key dispute has to do with the nature of property taxes. TIF schemes rely on the idea that if we build something good, the property tax draw from some area will increase more than it would have without building that thing, so let's assume that growth as securitization for borrowing the money to build the nice things. It's something like a student loan: Loan me vast sums today so I can pay to educate myself, and pay back the loan from the high income I hope to earn with my fancy degree.

In Ontario, property taxes have two components: A provincial share to pay for education, and a municipal share to pay for municipal government. The property owner pays one cheque, but it is divided between municipalities and the province. Toronto wants the TIF money to be loaned to the city by the province and the province to recoup the money out of increased property tax revenues on the provincial (education) share of the TIF area. This puts the risk on the province, if the expected property value growth does not occur, the Province would have to deal with the fallout of reduced property tax funding available for schools (a common TIF problem in the US). Naturally the province would prefer the city shoulder this burden.

Further, Tory's scheme requires more than doubling a limit Ontario put on the law that you can only TIF finance 1% of your normal municipal property tax take for your city. Toronto's property taxes amount to about $3.7B so this is about $37M a year. SmartTrack needs more than double that per year over 30 years to make the $2.5B.

It's hard to see how the province can agree to the city's position because in practical effect, in order to provide Toronto with $75M+ a year in TIF funds, Ontario would have to borrow this money too. If the province's position wins out, the usual problems with TIF schemes for cities rear their ugly heads: You often end up depriving the future city of needed property tax revenues, particularly if the expected revenue growth does not materialize.

Again, Tory's answer here all seems to be that by dent of his great relations and awesome leadership skills, he can chivvy the province to agree. I don't know what Plan B is if this fails. Cancel the Scarborough subway? He probably should propose doing that given how SmartTrack more or less makes that line redundant given the existing routing of GO lines in Scarborough, but unlike Finch & Sheppard, Tory has been definitive in committing to build the Scarborough subway extension, so it would be a big promise break to reverse on that. But it would free up $3B in funding.

Who is Tory appealing to? His messaging isn't as blunt as Ford's "downtown versus suburbs" war, but Tory has made dogwhistles to that, implying that he provides Transit to "all" Toronto not "just" downtown. Naturally the point that the "downtown" relief line is of primary benefit to suburban commuters since people who already live downtown don't need rapid transit to get there is generally lost in the city's unfortunate urban/suburban divide. Further, SmartTrack is calculated to appeal to drivers who want new transit, built in ways that doesn't close roads during construction, and that hopefully other people will ride so "their" roads get that much clearer.

The Grand Context

SmartTrack is probably not, in isolation, a terrible project as potential transit lines go. The grand context though is to ask "what are the alternatives? What else could we do with that money?" At a (politician derived, unverified) cost of $8B, it is nearly as much as the TTC 2012 estimate of the "full" relief subway loop from High Park down to King, and across back up to Pape and all the way to the Eglinton LRT. Given that the province will electrify the existing GO network and plans some kind of TTC fare integration, what are we really getting for our $8B? A few extra stations, no need to change trains at Union to continue on to Markham or Mississauaga if coming from the other side, and those 12KM of new track along Eglinton into Missauga. Oh and maybe it's built a few years sooner, if Tory's ungrounded pledges that it can be built in 7 years hold up.

The smart transit people I read all seem to say "electrifying GO lines is well enough, but we need that AND a relief subway" - and they were saying this before SmartTrack was a thing so the assessment is independent of feelings about John Tory. Tory's line would almost certainly preclude any realistic funding path for that relief subway (and no, it is not a replacement for it, it would only "relieve" a small fraction of the burden on the Yonge line, and further Union station will be overcapacity by 2031 without a relief subway along King).

No, the opportunity cost is far too high and the payback is far too little. We're already getting 90% of this from the Province anyway, and we'd have to give up 2 approved transit lines to some of our most at-need neighbourhoods most cut off from the city's rapid transit system. This is not the best deal for Toronto, even though it might be a good deal for John Tory, Kathleen Wynne, Markham, Mississauga & Stephen Harper.

Saturday, July 26, 2014

How did we let our bus fleet get into this bad a shape and why is Chow the only "major" candidate proposing anything to fix it?

The Toronto Star has today published a piece finding problems in the feasibility of Olivia Chow's promise to improve bus service if elected Mayor. To be specific, Chow promises to immediately improve peak hour bus service, the busiest times of day. The Star article casts doubt on whether this is feasible, quoting a TTC official who claims there would be no additional buses available for this.

The Election Forest: Making Buses a Priority is a Signal

A big reason I favour Chow in the Mayoral election is that she appears to be the only (major) candidate who will dedicate much attention to the bottom economic half of the city. This is fairly unsurprising when you consider we have four conservatives running against one progressive (being fair, Soknacki has some ideas helpful to lower earners). Buses are the biggest portion of transit time for many of the city's "left behind" areas and people, who don't tend to be very near any of the existing rapid transit lines. This is a matter of social and economic justice. Buses will never be the most desirable mode of transit, and we can't build LRTs or subways everywhere so of course many transit users are going to need buses for some part of their trip, but we can keep service levels high enough that when you go to get the bus, you know it will come soon, and not be jammed full when it gets there so that you can get on it.

Chow's bus promise is not the stuff of campaign consultants. Bus service isn't sexy, we just sort of expect it to work, but under Ford (and Stintz as TTC Chair) bus service has been cut back. The working class people and students most reliant on them now have to wait longer for their bus, and face more frequent buses too full to board. So it is a very good thing that someone is putting this on the agenda, just as a signal that "transit is not all about who will build the most choo-choos, bus service matters" Finding problems in the specifics of Chow's bus service plan is fine and all, it's the kind of scrutiny that should be applied to political campaigns, but at least Chow has buses in mind.

The Trees: Less There Than the Star Thinks

The Star's TTC source, Chief Service Officer Rick Leary presents a case where all the buses are already in use at peak times, and even the extra buses currently servicing under-repair streetcar lines are only available because service demand slows in the summer, but they'll be needed in the fall when school starts. He further seems to announce a new initiative (news to me anyways) to take more buses off the road to do more preventative and less post-breakdown maintenance. He does allow there "might" be buses available to improve off-peak service.

I'm in no position to make expert assessment of his claims in this regard, but I do note that the Queen's Quay streetcar has been off service for considerably longer than just the summer. Apparently the TTC had buses to serve that line prior to the end of school this year somehow. But, turning to those actual experts, let's check in with Steve Munro, who previously (March 2014) looked at TTC surface short term service improvements:

The TTC plans to retire over 200 buses in 2014-15 (the lift-equipped Orion V and Nova RTS buses). These could provide a pool of vehicles during the two years it would take for expansion-related new bus orders to arrive.

It would have been nice if the Star has known about this, and asked Leary. As the TTC is busy getting new buses, it is strange he plans to do more preventative maintenance with a fleet of newer buses, but mainly it means there are buses that could be used for Chow's pledge. The TTC does not generally run buses to the literal end of life of the vehicles, they just get more expensive to maintain once they pass a certain point.

(Munro also notes that progress in the York subway extension should by 2015 release some buses currently needed for "supplementary service" and that there is a major construction hiatus for the Pan Am games so no streetcar lines should be out of service.)Ok, So There are Buses: Where to Store them?

This is a real problem, the article correctly points out the TTC has no additional storage grounds, and the planned one won't be ready before 2019 at the earliest (currently not even funded to begin, so almost certainly later than that). Per Munro (ibid):

The TTC has already looked at leasing storage space for its fleet while awaiting the construction of Tapscott Garage, although this need was offset by the reduction of bus requirements made possible with less generous crowding standards. (Note: Munro is here referring to the Stintz/Ford era service cuts)

We are, ultimately just talking about parking lots here. Yes, I'm sure it's operationally easier for the TTC to run from dedicated storage/maintenance facilities but in a pinch, any big enough lot should do.

Ok, So There Are Places To Store Them. But Drivers?

Yes, the TTC might have to hire more drivers to implement Chow's improved service levels. What of it? Buses need drivers and our ever growing population will eventually necessitate more buses & drivers anyway. Every candidate's plans to expand transit will entail hiring staff. In the very short term I expect some additional drivers can be found by paying overtime to existing ones who would ordinarily be off shift. How long does it take to hire & train bus drivers? Chow assigns $15M to this whole promise, which presumably includes money to hire and pay new TTC employees to drive the buses.

Off Peak Service Matters Too

All the challenges aside with finding more buses, drivers & storage for peak service, improving off-peak service matters too. Plenty of people (like seniors) ride the bus outside of peak hours and 15 minute service instead of 30 minute service matters when you're out waiting at a stop in the middle of the day or in the evening.

The Other Forest: Why is The TTC's Bus Fleet in Such Dire Straights?

The biggest takeaway I get from the Star's piece is that we've allowed our TTC surface fleet to get to such a terrible place where TTC management is (in effect) telling reporters during an election they simply can't improve peak service before something like 2019. Mayor Chow or no, our population is growing and demand for buses will grow too...or maybe it will simply peak at some level of "just absolutely full" on many routes where additional commuters are forced to find other means to get around (cars) and making our gridlock problems worse. Rather than viewing this as some big scandal in the Chow campaign, the scandal is that we let ourselves run out of breathing space on our bus fleet. Whoever is mayor will have to grapple with this, and at least Chow is already interested in the problem. The worst thing would be to just "muddle through" with degrading service and ever more peak capacity buses leaving people behind. Supporters of other Mayoral candidates should ponder, what will my candidate do about this?

Wednesday, March 5, 2014

In November, the TTC board decided to raise fares for 2014 by approximately $60/year for people who buy metropasses every month. Many have already noted that this amount is the same as the $60 VRT that Mayor Ford and Council repealed early in this term. Quite plausibly, this is a regressive tax transfer from a form of taxation that falls more heavily on wealthier residents (e.g. those with cars) to one that falls more heavily on poorer residents (those reliant on the TTC). As the TTC is already one of the least subsidized and most expensive transit systems around, it is reasonable to ask when and how a major subsidy increase for the TTC from Toronto's general revenue could ever be funded?

Toronto is Canada's 6th largest government (by both population and government expenditure) and has no formal means of levying progressive taxation on its better off residents. The City of Toronto Act gives Toronto a few extra taxation powers that other Ontario municipalities don't have, and yet none of these can be explicitly progressive. In particular, the act explicitly prohibits property taxes (Toronto's top source of revenue) from being anything but flat-rate. Why should this be so?

Progressive Property Taxes

Numerous countries and municipalities which employ property taxes have already implemented mechanisms to explicitly make them progressive in nature, meaning roughly that the most expensive properties are taxes at higher rates than inexpensive properties.

Examples:

Singapore introduced a multi-rate scheme in 2010 with higher rates on the portion of properties valued above a certain cut-off, an exemption on the first (quite low) portion of property values

Misunderstanding of progressive taxation is quite common. In the realm of income tax, it is not difficult to find people who believe that if they get a raise that bumps their total income into a new higher tax bracket, they will end up worse off after taxes because they think their whole income gets taxed at the higher rate. This is not how escalating bracket rates work. Only the portion of your income above the threshold is charged at the higher rate.

Let's look at Ireland's nationally set, but locally paid progressive property tax for a simple example. Ireland charges home owners 0.18% on the value of property under 1M Euro, and 0.25% on any value above 1M Euro. Let's imagine two homes, one worth 600,000 and the other 1.2M (twice as much). The first will pay 600,000 x 0.18% = 1080 euros. Simple. The second requires an extra step:

If the second house paid 0.25% on the whole value of the house, that would be 3000 euros. Instead, the house worth twice as much pays 2.12 times as much property tax. That .12 is the progressive part. No one need hold off renovating their 950,000 euro house because it will cross the magic value threshold and dramatically increase their tax burden.

Why Do It?

There is actually a good argument out there that property taxes are inherently mildly progressive (one obvious reason: wealthier people are more likely to own property and pay it), so why not make it explicitly progressive? Particularly in an era of vastly growing inequality, some areas have done very well, but large swaths have been left trailing behind. As the city cannot levy income taxes, a progressive property tax would be a great way to begin to address the inequality. From "The Three Cities" (p1), this:

Is why the politics of property tax increases are as contentious as they are. Many of the people in the brown sections are hurting. Even if they're renters, some amount of property tax increases flow through to them, and for those who own in lower and low-middle class neighbourhoods, property tax increases hit them hard. Many quite legitimately feel they cannot afford higher taxes, and are not just grousing, it actually materially affects their lifestyle. It even forces some out of their homes. Like Toronto's other mostly flat taxation powers, the problem is that flat taxes max out at the realistic ability to pay of the least affluent people subject to them. Yet many others above that level have the means to pay more, but this can only be achieved with progressive rates. In the past this awkward reality was "squared" by contributions from the Province, who can and does have explicitly progressive taxes, but they're proving less willing to pay their share over time. Rather than assume trends like this below (chart refers to the TTC) will reverse themselves, Toronto should act to address its needs and not wait for the fairy godmother to re-appear.

Singapore provides an example of another advantage here, by introducing a progressive property tax structure that cut taxes on lower valued properties while increasing taxes on the high value ones. Not only can we charge more from those who most benefit from the city, but we can give those more likely to find each day a struggle a break.

A final advantage worth mentioning is that it is administratively very simple to do, since the city already has a property tax collection, assessment and enforcement system in place. Unlike setting up fun and exciting new forms of taxation like road tolls or sales taxes, which need things like infrastructure and whole new departments of staff to run, this would only incrementally increase the work effort of the existing property tax staff. Toronto already charges different rates for different types of property (including a regressive higher rate charged on multi-unit apartment buildings that mostly falls on low-income renters once passed along by the landlords), this is logistically very easy to do.

Problem: It's Illegal

The province would need to amend the City of Toronto Act to allow this. They should, particularly if Toronto City Council asks them to. Toronto has an elected government, why should it not have the same capacity the Province does to decide that wealthier citizens should bear more tax burden? Virtually every other tax in Canada is at least somewhat progressive, even the GST has rebates for low-income Canadians. Why should municipalities not have this power? Premier Wynne is currently searching for "revenue tools" to fund transit. Keep searching, but give Toronto increased taxation powers as a mature order of government (Ford notwithstanding) - something the province has already acknowledged in the 2006 Toronto act, which granted the city extraordinary powers that other Ontario municipalities do not have. This is just a concession to reality: Toronto is Canada's sixth biggest government, if it cannot "handle" these powers, we'd better amend the Constitution to take these powers away from the five smallest Provinces too.

Toronto is going to need sigificant new revenue to address its urgent and still growing needs:

Massive transit improvements from new lines to major maintenance deficits on the existing system

Up until now the City has basically been waiting for higher orders of government to fund these things. A progressive property tax need not preclude that, but it would allow the city much greater flexibility to move on these items on its own, and ask the Province or Federal government to contribute to an in-progress plan which the City can lead, rather than spend months or years careening back and forth between the levels trying to work out a financing deal for any major project. Toronto needs progressive property taxes.